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Investigation Ordered Into Allegations of Improper Denial of Auto Injury Claims

19 July 2000

Commissioner Senn Orders Targeted Investigation Into Allegations of Improper Denial of Auto Injury Claims

    OLYMPIA, Wash. - State Insurance Commissioner Deborah Senn said today she 
has ordered her staff to investigate national allegations that auto insurers 
rely on "medical reviews" performed by laypersons to deny insurance benefits to 
policyholders injured in auto accidents.

    "This is an issue that we looked at in 1996, making sure auto insurers
used the right type of health-care providers to review auto-injury claims,"
Commissioner Senn said. She also invited Washington consumers to report any
firsthand trouble they had experienced with "medical reviews" and auto claims.

    Commissioner Senn said Washington state has consumer protections in place
that should prevent improper denials. She noted that "Dateline NBC," which
reported the allegations in June, also acknowledged that Washington is one of
four states that has reacted to the problem.

    "There are serious allegations about companies who do business in the
state of Washington, and we want to be sure that the industry is adhering to
the rules we have spelled out," Commissioner Senn said.

    In 1997, Commissioner Senn adopted regulations that require insurers to
use "like licensure" providers. This means that, if the patient sees a
chiropractor, the insurance company cannot have the treatment reviewed by an
orthopedic surgeon who is not trained in chiropractic.

    Commissioner Senn said she had ordered six of the largest carriers doing
business in Washington state to submit claims data so her investigators can be
certain that Washington consumers are getting the benefits they pay for in
their auto insurance policies.

    The new allegations were raised in a "Dateline NBC" program in late June.
The program said auto insurers today rely upon "medical opinions" from
nonprofessionals to deny valid claims.

    Commissioner Senn said the six companies targeted by the investigation
are:  State Farm Mutual Insurance Co., Safeco Insurance Co., Farmers Insurance
Co. of Washington, Pemco Insurance Co., Mutual of Enumclaw, and Allstate
Property & Casualty Co.

    Together, the six account for approximately half of the auto insurance
sold in the state annually.

    Commissioner Senn said she wants the investigation to proceed as quickly
as possible so faulty insurance company practices do not deprive Washington
policyholders of legitimate benefits.

    Commissioner Senn said the Dateline report raises questions about the
so-called "paper reviews" in which a medical reviewer simply looks over the
paperwork involved in treatment but never interviews the patient. The Dateline
report said it found many "paper reviews" were not even conducted by licensed
health-care providers.

    That should not be true in Washington state if companies are following
state law, Commissioner Senn said, noting that carriers conducting such
reviews are obligated under "like licensure" to use health-care providers, not
laypersons.